Every year the Fabricators & Manufacturers Association hosts at least one workshop on lean manufacturing. Called LeanFab Workshop & Tours, these don’t cover cookie-cutter lean, but instead improvement methodologies that work for high-mix, low-volume operations--in other words, most of U.S. manufacturing.
This year’s conference, led by our Improvement Insights columnist Dick Kallage of KDC & Associates, and held in Columbus, Ohio, June 4-5, included tours of Ohio Laser, a fabricator in Plain City, Ohio, northwest of town; and of Emerson Network Power’s Columbus fabrication plant, which makes Liebert-brand cooling units for corporate data center facilities.
The conference revealed a telling reality of modern metal fabrication. New technology is essential to stay in the game, but it really just gets a fabricator to the table. Customers now simply expect good quality from new punches, lasers, and brakes able to hold tight tolerances.
What sets a fabricator apart is stellar on-time delivery. For many customers, a cheap part delivered late is way more expensive than a costly part delivered on time. In FMA’s 2012 Financial Ratios & Operational Benchmarking Survey, almost a third of respondents said their on-time delivery rate was 85 percent or less.
To be sure, the on-time metric hides some subtle realities. A shop may deliver a day late on multiple orders--each of which causes few if any disruptions in the supply chain--though that fabricator still can have an 80 percent on-time delivery rate. Meanwhile, a shop with 98 percent on-time delivery may be a week late with several extremely time-sensitive orders and cause havoc for customers and customers of customers. The on-time delivery metric may look good, but it doesn’t reflect how successful the shop truly is.
Regardless, no one can argue that on-time delivery matters to customers. In June, LeanFab workshop attendees concurred that on-time delivery is a problem for many. So what causes these late deliveries, exactly? Is it a matter of customer mix and concentration? In FMA’s survey, a quarter of respondents said that five or fewer customers made up 80 percent of sales. Lose one of those huge accounts, and a shop can get into trouble fast. So it’s understandable why a fabricator gives those big customers priority.
Does it come from subcontracting? A few years ago I visited a job shop where managers put together a Gantt chart showing how long each operation took and (most important for lean) the material handling and queue time between operations. The longest bar on the chart didn’t represent inefficient material handling or from a welding or bending bottleneck; it was for the outsourced plating operations. Some shop owners have told me they avoid subcontracting whenever possible, because they want to appear to be a reliable partner for their customers, and they don’t want a late subcontractor hurting their reputation.
Does it come from overproduction? Workcell efficiency doesn’t mean much if it’s producing parts that aren’t needed immediately. Moreover, customers don’t care about a machine’s green-light-on time. They care about quality products delivered on time. Machines punching, cutting, or bending don’t make money; good parts and products shipped to customers do.
Overproduction, subcontracting, customer mix and scheduling--these and others certainly factor into the late-delivery conundrum, but are they really root causes?
LeanFab speakers and attendees alike seemed to talk about challenges that, when you think about it, all lead back to poor communication. An operator may cut the wrong material because it isn’t labeled properly. A job may have the wrong part revision attached to it. The engineer and salesperson might fail to communicate on certain job specifics, and so go back and forth with the customer to clarify an order. Often a part spends more time in the virtual world, being discussed in e-mail after e-mail, than it does on the shop floor. In fact, thanks to modern machine tools, once a job hits the shop floor, it’s usually smooth sailing. As some attendees opined, the problems often occur at every stage before a job is released.
Put another way, actual fabrication has become relatively straightforward. But because job shops now receive so many small orders, ineffective processing of information has become a major root cause of so many problems downstream. This becomes even more of a challenge when departments become silos or fiefdoms, concerned only with how efficiently they can do their jobs, and not thinking much about how their work affects other departments.
To overcome them, managers are breaking down departmental barriers; cross training; documenting procedures; and, most important, communicating everything clearly, concisely, and completely. It’s great that an estimator can quote so many jobs in a day, but if a lot of won orders get hung up in engineering or, even worse, are released to the shop floor in an incorrect form, all that quoting activity doesn’t mean much.